Approval of Belgium’s new Company Code

On February 28, 2019, after years of work and months of parliamentary discussions, the new Code of Companies and Associations was approved by the Belgian Parliament in plenary session.

Everyone agreed that Belgium desperately needed a more attractive, modern and flexible company law in line with the needs of entrepreneurs, start-ups and SMEs.

It is nonetheless unfortunate that the last mile of this crucial reform was a badly played political spectacle. On this point, please see our opinion piece which will soon be available on our website.

Deminor is pleased with the extensive changes brought by the Code, and in particular:

• the consolidation, within the same code, of provisions concerning companies and associations;
• the limitation of the number of company forms and types of associations;
• the in-depth reform of the SPRL (now “SRL”) which becomes the “default” kind of company: no capital requirement, flexible voting and property rights, flexible choice of the management body, etc.

However, the introduction of double voting rights (so-called “loyalty shares”) in listed companies raises strong concerns for Deminor and violates the principle of equal treatment of shareholders (“one share, one vote”). Furthermore, granting loyalty shares will only require a majority of 2/3^rd (instead of 3/4 as for any other amendment to the articles of association).

Deminor will therefore pay close attention to the protection of minority shareholders’ rights whenever a Belgian listed company will propose to grant double voting rights.

The Code of Companies and Associations will gradually come into effect between May 1^st, 2019 and January 1^st, 2024.

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Deminor will guide you through each step of your transition to the new regime.
Please contact Stéphanie Abiraad for further information.